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Calvalley Petroleum Inc. Provides Operational Update

CALGARY, Aug. 23 /CNW Telbec/ - Calvalley Petroleum Inc., (TSX: CVI.A)
Calvalley Petroleum Inc. (the "Company" or "Calvalley"), an international
oil and gas exploration and production company based in Calgary, Alberta, is
pleased to provide the following update regarding its operations on Block 9 in
the Republic of Yemen. Calvalley owns a 50% gross working interest and is the
operator of Block 9 under a production sharing agreement with the Government
of Yemen. Calvalley holds 2,234 km(2) of land area in the prolific
Sayun-Masila basin, of which only a relatively small area has been explored to
date.
Exploration Activities
A number of prospects have been identified by Calvalley for exploration
drilling during the third and fourth quarters of 2007. Each prospect has
attractive and unique characteristics with multiple potential pay horizons and
it is anticipated that the prospects will be drilled to basement in order to
fully evaluate the entire stratigraphic succession of each. The Malik
prospect, for example, is a large anticlinal feature located sixteen
(16) kilometers east of Hiswah and eleven (11) kilometers south of Qarn
Qaymah. This is a new play fairway with serious potential closures along the
trend. The well was spud on July 27 and Calvalley anticipates completion of
the well by mid-September. Calvalley anticipates the well reaching a total
depth of approximately 3,600 meters.
Further, Calvalley plans to drill two (2) additional exploration wells
prior to the 2007 year end.
Well Testing
At the beginning of 2007, a comprehensive evaluation of Hiswah field was
initiated to better understand the reservoir characteristics. Five of the
least productive wells within the Hiswah field were selected as candidates for
a Productivity Enhancement Pilot Program ("PEPP"). The initial PEPP program
consisted of selecting three wells for multilateral drilling and two wells for
acid stimulation. Following the implementation of the PEPP program, the
production test results for those particular wells were very positive.
The table below summarizes the latest production tests on the
participating Hiswah wells and the post-stimulation or optimization test
results of those wells.
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Initial Production Test Post Treatment Production Test
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Well Oil GOR Treatment Oil GOR
(Bbl/d) (scf/Bbl) (Bbl/d) (scf/Bbl)
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H-9 288 512 Two extra laterals 503 435
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H-13 234 528 One extra lateral 328 447
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H-14 100 120 Acid stimulation 370 678
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H-17 96 944 Two extra laterals 506 413
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H-18 198 549 Acid stimulation 270 687
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Based on the test results, both methodologies of production stimulation
were successful. In light of these successes, the Company engaged a third
party engineering firm to assist in a reservoir simulation program and the
implementation of the PEPP program on all the remaining wells within the
Hiswah field.
Financial Statements
The Company has recently received numerous inquiries which are reflective
of current market concerns relating to the heavy investment by some companies
within the industry upon asset-backed securities. In light of these inquiries,
the Company would like to reiterate that, as reflected in Note 2(l) "Cash and
Cash Equivalents" of the Company's second quarter financial statements
released on August 14, 2007, Calvalley does not invest in any asset-backed
securities. All cash balances at any time consist of bank deposits and
bank-issued term deposits of thirty days or less.
Calvalley is listed on the Toronto Stock Exchange, trading under the
symbol "CVI.A".
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release may contain forward-looking statements including,
without limitation, financial and business prospects and financial outlooks,
and such statements may be forward-looking statements which reflect
management's expectations regarding future plans and intentions, growth,
results of operations, performance and business prospects and opportunities.
Words such as "may", "will", "should", "could", "anticipate", "believe",
"expect", "intend", "plan", "potential", "continue", and similar expressions
have been used to identify these forward-looking statements. These statements
reflect management's current beliefs and are based on information currently
available to management. Forward-looking statements involve significant risk
and uncertainties. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements
including, but not limited to, changes in general economic and market
conditions and other risk factors. Although the forward-looking statements
contained herein are based upon what management believes to be reasonable
assumptions, management cannot assure that actual results will be consistent
with these forward-looking statements. Investors should not place undue
reliance on forward-looking statements. These forward-looking statements are
made as of the date hereof.
Forward-looking statements and other information contained herein
concerning the oil and gas industry and Calvalley's general expectations
concerning this industry are based on estimates prepared by management using
data from publicly available industry sources as well as from reserve reports,
market research and industry analysis and on assumptions based on data and
knowledge of this industry which Calvalley believes to be reasonable. However,
this data is inherently imprecise, although generally indicative of relative
market positions, market shares and performance characteristics. While
Calvalley is not aware of any misstatements regarding any industry data
presented herein, the industry involves risks and uncertainties and is subject
to change based on various factors.
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